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Operations management encompasses all activities in an organisation that transform its inputs into desired outputs. Operation Management’s activities consist of planning, designing, implementing and controlling the firm’s operation through an efficient and effective use of its resources to produce and deliver goods and services so as to satisfy its customers’ needs (Slack, Chambers, & Johnston, 2004).
Quality is very important in the mind of the customer because it influences the choice in purchasing that product. A quality product is one which satisfies customer demand completely and which is done right the first time itself. The quality of a product can be classified in two categories, which is firstly the design quality and secondly the performance quality of a product. Design quality involves the purpose of a good or facility. A shopper usually classifies the quality of a product through its look, process and dependability. Furthermore, performance quality involves the extent to which products and services correspond to the plan of the design.
Quality management is essential to effective operations management, particularly continuous management. More recent advancements in quality, such as benchmarking and Total Quality Management, have resulted in advancements to operations management as well. Quality management ensures that there is quality in a products and services. Although there are different approaches to solve quality issues, all the goal are the same which is to create a high quality, high performing product or services which is in conformity with customers’ expectations.
Quality management is very important in companies for various reasons. It ensures product quality in the sense that product can be produced as per stated promise, which is durability, performance and reliability. Customer satisfaction where surveys can be conducted to understand the qualities customers want from the product, as well as how it can be improved. Increased revenues as quality products and services give the company a spotless reputation in the industry and this can lead to new customers and also selling additional products and services to existing customers. Moreover unnecessary processes can be eliminated and the employee can do the same job in less time thus decreasing the additional salary paid him. Quality management also helps to reduce wastage as companies that house inventory has to incur the holding costs and also tracking of the inventory which ultimately will be included in the price. Therefore, to keep inventory at a low level without incurring any waste, manufacturers can work closely with suppliers using a Just-In-Time philosophy and thus becoming more responsive to customers.
Research methodology is a system of collecting data for a research project which provide critical insight into the subject matter of the research. The basis upon which the research approach is selected depends upon the requirement of the research topic and its main objectives. (Fraenkel and Wallen. 1993). According to Saunders et al the two main types of research approaches are quantitative and qualitative research. For the purpose of collecting data on the quality aspect of the operational management, the researcher has adopted both qualitative and quantitative approach.
Primary data was obtained from Tesco branch of Thornton Heath which was selected for this purpose and was compared with the Waitrose branch of Croydon. Research techniques such as face to face interviews using open ended questions with the store managers of both supermarkets were used. In addition observation of the processes across various branches of Tesco and Waitrose was done for a period of two weeks. These two particular research techniques were chosen because it enables the researcher to get more detail and additional information which could not have been obtained otherwise if another research methodology for example questionnaire was used. Moreover it enables the researcher to have an insight in the quality problems existing in the operation management. The information obtained during the interviews and through physical observation is used to generalise the quality system and philosophies adopted across all branches as Tesco and Waitrose because as a franchisee these supermarkets are much known for standardisation across all their levels of area of business.
Secondary data is another method of obtaining data which is readily available at relatively no cost from sources such as the company website, books, and academic journals at relatively no cost.
Some of the limitations of the research techniques used for this research were that the store managers refused to answer some of the questions.
HISTORY OF BUSINESS
Supermarkets giant Tesco was founded in 1919 after the First World War by Jack Cohen when he started selling surplus groceries from a stall in the East London and made £1 profit from £4 sales. Tesco got its name from the initials of TE Stockwell where he was a partner in the firm of tea suppliers and CO from his surname. He managed to cope with adverse economic conditions and subsequently with rapid changing technology, increasingly sophisticated consumers and competitions. The first official store was opened in 1929 and the company kept flourishing throughout the twentieth century. In 1992 the company launched its slogan ‘; every little helps”, followed by Tesco value in 1993 and in 1995 it overtook Sainsbury’s and became the UK’s largest food retailer. . It managed to become the first British trader with a company’s loyalty card when the Tesco Clubcard was introduced, and has also developed many innovative products and services to make more profit. Today, Tesco has 2482 stores in the U.K and 2329 stores in other countries, with an overall staff number of 472,000 worldwide.
Waitrose is the UK leading chain of quality food retailer and is part of John Lewis Partnership since 1937.Founded in 1904 by William Waite, Arthur Rose and David Taylor in a small town called Acton in West London, today Waitrose is the country most successful, innovative and largest chain of supermarkets differentiating itself from its competitors by providing high quality products and excellent customer services. It mainly targets the high income earners. As to date, Waitrose has 228 branches across the United Kingdom and a 4.3% share of the market, making it the 6th largest grocery retailer in the UK. Waitrose has been expanding in the domestic market by adopting a strategy of growth by acquisition and very recently it has started to franchise its licence. Its first overseas store was opened in Dubai in April 2008 and its plans to focus more on its overseas market in the near future. The main competitors of the chain of supermarket are Marks and Spencer, Tesco, Sainsbury and many more.
COMPARISION OF TESCO AND WAITROSE
Tesco quality philosophy is to deliver the best possible service to the customers by providing high quality products at cheaper price. Its target market is the middle income with young children.
Waitrose is committed to bring the best quality of food. Its price is at a premium. It has built its reputation on its quality and the freshness of the food. Its targeted market is the high income earners and compared to Tesco, its stores are located in affluent areas.
Even though Tesco and Waitrose cater to different segments of income group customer both the store stress on quality. They take different aspects into consideration while choosing the products that need to be displayed on their shelves. Below are the various methods that both the stores consider
Tesco takes regular feedback from their customers regarding the quality of the products and the service they received from the stores. Based on the feedback, the Quality control team ensures that the products that reach the stores are of high quality. This ensures the product consistency and good value for the customers, every time. Tesco’s quality and life of the products are constantly monitored and sample checked across various steps in supply chain from production to the stores. According to Tesco “Would I buy it” strategy is employed which empowers anyone involved with the production, packaging and shelving. The persons involved in these stages have the right to reject the product which below the specification.
Apart from the above methodology, the products are also tested independently every month. This ensures that the delivered product is up to the quality. They also have a technical standard guideline which has to be followed by everyone involved in the supply chain. They consult industry bodies, environmental experts and food safety experts to advise on production aspects. Tesco over the past few years has effectively introduced six sigma methodology across various departments and has successfully reduced the carbon di oxide emissions and also saving energy.
Similar to the approach taken by Tesco, Waitrose also takes the customer feedback into consideration while doing quality testing. Waitrose looks for producers who can offer quality products and sets very high standards while preparation of the food products. According to Waitrose they uphold high standards of food safety and hygiene, by the usage of latest farming techniques. These include HACCP (Hazard analysis and critical Control Points) systems, ICM (Integrated crop management) system and LIFE (Linking Environment and farming). HACCP is used in food production to identify potential hazards and to control the risks in future. ICM is used to ensure that best horticulture practices are followed and LEAF is independent charitable organisation that helps farmers to reduce the environmental impacts.
Recently Waitrose have successfully implemented SAS software to improve the stockholding and cut wastes. This helps them in forecasting customer demand and ensures right product is shelved at the right time. According to Waitrose, this has helped them to reduce stockholding by 8% and wastage by 4%, thus increasing the customer satisfaction through high product availability.
The quality approaches of Tesco and Waitrose will be compared and contrast as follows:
Quality of product
Quality of products depends on the requirement and satisfaction of customer. Much focus is being placed on quality of products by most of the organisation and Tesco and Waitrose are no different. Both companies offer the range of organic foods which are becoming more and more popular nowadays.
The Bags for life scheme is becoming popular in supermarkets so as to cut down the number of traditional carrier bags and therefore, reducing the number ending up in landfill sites. Once the Bag for life is worn out customers can replace it free of charge.
Tesco’s front line initiative if there is more than one person queuing at a single check out then another one is open and also customers are encouraged to give instant feedback on the service thus helping in improving the offer and the service. On the other hand, Waitrose has the quick check method where customers can scan their items and pack them as they are shopping and when finished, they pay at the quick check till without having to unpack and repack their goods.
For any business to grow or to compete with others it has become mandatory to use the latest technologies across various levels. Tesco can launch an application with barcode reader integrated with Tesco club card and mobile number. The customer can select the items and scan it through the barcode reader app. At the end of the shopping he/she just scans her app on the till or enter the reference number (could be registered mobile number) provided by the app. This is automatically updated on to the customer’s club card. This way queues can be reduced by large at the tills. There by increasing the customer satisfaction. Also, Tesco can implement Drive-Thru shopping; where in customer shops online and pays for it online if necessary. The customer just drives at the specified time with the reference number and picks up his goods at the counter just like the Mc Donald’s drive thru.
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